PRESENTATION OF

CORPORATE
GOVERNANCE
TOPIC: KINDS OF
COMPANIES
PRESENTED TO:
MS.
PRESENTED BY:
KG
 MEANING OF COMPANY
A company is a natural legal entity formed by the
association and group of people to work together towards
achieving a common objective. It can be a commercial or
an industrial enterprise. 

According to the definition of a company by the

Indian Act 2013;
‘‘A registered association which is an artificial legal
person, having an independent legal, entity with
perpetual succession, a common seal for its signatures, a
common capital comprised of transferable shares and
carrying limited liability.’’
 KINDS OF
COMPANIES
ON THE BASIS OF

INCORPORATIO PLACE OF LIABILITY OF MEMBERSHIP

AUTHORITY
N REGISTRATION MEMBERS PATTERN

• Statutory • Indian • Limited By Share • Private Company • Holding

• Charted • Foreign • Limited By Guarantee • Public Company • Subsidiary
• Registered • Unlimited Liability • Govt.
 ON THE BASIS OF
INCORPORATION
a) Chartered companies
Companies set up as result of royal charter granted by a king or queen of a country are
known as charted companies.

b) Statutory companies
Companies set up by the special act of parliament or state legislatures are called statutory
companies.

c) Registered companies [Section 2(20)]

Companies registered under the companies act 2013 or under any previous companies act
are called registered companies
 ON THE BASIS OF PLACE OF
REGISTRATION
a) Foreign Companies[Section 2(42)]
Foreign companies are incorporated outside India.
They also conduct business in India using a place of
business either by themselves or with some other
company.

b) Indian companies[Section 2(20)]

It is a company formed and registered under the
Companies Act, 1956. The registered or principal
office of the Indian company, corporation, institution,
association or body, in all cases, should be in India,
though it may carry on some business activities on
foreign shores also.
 ON THE BASIS OF LIABILITIES
a) Companies Limited by Shares[Section 2(22)]
Sometimes, shareholders of some companies might not pay the entire value of their shares in one
go. In these companies, the liabilities of members is limited to the extent of the amount not paid
by them on their shares.
This means that in case of winding up, members will be liable only until they pay the remaining
amount of their shares.
b) Companies Limited by Guarantee [Section 2(21)]

In some companies, the memorandum of association mentions amounts of money that some

members guarantee to pay.
In case of winding up, they will be liable only to pay only the amount so guaranteed. The
company or its creditors cannot compel them to pay any more money.

c) Unlimited Companies[Section 2(92)]

Unlimited companies have no limits on their members’ liabilities. Hence, the company can use
all personal assets of shareholders to meet its debts while winding up. Their liabilities will extend
to the company’s entire debt.
 ON THE BASIS OF MEMBERSHIP
PATTERN
a)One Person Companies (OPC) [Section 2(62)]
These kinds of companies have only one member as their sole shareholder. They are separate
from sole proprietorships because OPCs are legal entities distinct from their sole members.
Unlike other companies, OPCs don’t need to have any minimum share capital.
b) Private Companies[Section 2(68)]
Private companies are those whose articles of association restrict free transferability of shares. In
terms of members, private companies need to have a minimum of 2 and a maximum of 200.
These members include present and former employees who also hold shares.
c) Public Companies[Section 2(71)]
In contrast to private companies, public companies allow their members to freely transfer their
shares to others. Secondly, they need to have a minimum of 7 members, but the maximum
number of members they can have is unlimited.
ON THE BASIS OF AUTHORITY OF
COMPANY

a)Holding Companies[Section 2(46)]

This type of company directly or indirectly, via
another company, either holds more than half of the
equity share capital of another company, or
controls the composition of Board of Directors of
another company.

b) Subsidiary Company
A company, which operates its business under the
control of another (holding) company, is known as
a subsidiary company.
c) Government Companies[Section 2(45)]
Government companies are those in which
more than 50% of share capital is held by
either the central government, or by one or
more state government, or jointly by the central
government and one or more state government.
 OTHER TYPES OF COMPANIES
a) Charitable Companies (Section 8)
Certain companies have charitable purposes as their objectives. These companies are called
Section 8 companies because they are registered under Section 8 of Companies Act, 2013.
Charitable companies have the promotion of arts, science, culture, religion, education,
sports, trade, commerce, etc. as their objectives. Since they do not earn profits, they also do
not pay any dividend to their members.

b) Dormant Companies[Section 455]

These companies are generally formed for future projects. They do not have significant
accounting transactions and do not have to carry out all compliances of regular companies.
c) Producer Companies [Section 581B]
“Producer Company” means a body corporate having objects or activities specified in
section 581B and registered as Producer Company under the Companies Act, 1956.
A producer company can be defined as a legally recognized body of farmers/ agriculturists
with the aim to improve the standard of their living, and ensure a good status of their
available support, incomes and profitability.

d) Small Company [Section 2(85)]

Small company” means a company, other than a public company,—
1. paid-up share capital of which does not exceed 50 lakh rupees or such higher amount
as may be prescribed which shall not be more than 10 crore rupees; and
2. turnover of which as per profit and loss account for the immediately preceding
financial year does not exceed 2 crore rupees or such higher amount as may be
prescribed which shall not be more than 100 crore rupees
e) Investment Companies [Section 186]
The Investment Companies are the companies which
have a fundamental business or transaction relating
to the securities of other companies.
Securities may be of a nature of shares or debenture
or other securities offered by such entity.
The investment is aimed not only at the acquisition
and holding but perhaps to even the sale of the
securities whenever they reach a better price.